Are You a California Teacher Looking to Buy a Home?
If you are a teacher in California looking to buy a home, you should consider the CalSTRS Home Loan Program before selecting a mortgage. With CalSTRS Home Loan Program teachers who are members of CalSTRS can buy a new home, refinance to a lower payment or take cash out with these competitive rate programs.
Who is Eligible?
If you are a California teacher who is a member of CalSTRS or if you receive a paycheck from a California public school (custodians, administrators, teacher’s aides), you are eligible for the CalSTRS Home Loan Program.
What Programs Are Available?
With the conventional 15 or 30 Year fixed rate program, competitive rates are available for the purchase of a new home or refinancing your existing home on loan amounts up to $834.000.
With the 80/17 Program, borrowers put 3% down and get an 80% first mortgage and a 17% deferred second mortgage that has no payments due for 5 years. Loan amounts for this program are up to $650,000.
Tell Me More About the 80/17 Program
With the 80/17 program, California teachers are able to qualify for a higher loan amount than they would with conventional financing due to the deferred second mortgage because the deferred payment is not factored into the borrower’s affordability. For example, a borrower with $72,000 gross yearly income and no debt would qualify for a $500,000 loan amount with the CalSTRS 80/17 program, $435,000 with the FHA 3.5% down payment program and $335,000 with a conventional 5% down payment loan. With the CalSTRS loan, the borrower would need $15,000 for a down payment, the FHA loan would require a $15,225 down payment and the conventional loan would require a $16,750 down payment.
Interest will accrue on the deferred loan over the 5 years, but no payments will be required. At that point, you can either pay the increased mortgage payment, or refinance to a CalSTRS conventional loan program or other loan program.
Don’t worry about forgetting this deadline. We monitor our client’s mortgages with our Mortgage Adoption Center and will contact you yearly to reevaluate the suitability of the loan program for your financial goals at no charge to you. We’ll also continue to monitor the market and alert you when there is an opportunity for you to save money on your mortgage for the life of the loan!
Ready to Explore How Much You Can Afford with CalSTRS?
Call us at (650) 520-0915 or email us today and we will arrange a free, no obligation consultation to explore your financial situation and how you can best position yourself to finance your home.
Stay tuned for our next post comparing the CalSTRS 80/17 Home Loan Program to conventional financing.
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
Related posts:
- How does the CalSTRS 80/17 Home Loan Program Differ from Conventional Financing?
- Can I Put More than 3% Down on a CalSTRS 80/17 Loan?
- City of San Mateo First Time Home Buyer Loan Program
- First Time Home Buyer Loan Program for Financing Foreclosures
- Two Down Payment Assistance Loan Programs for Home Buyers
